Pension plans?

jlg1

Hi everyone,

I hope Ive posted in the right place.....

I just had a general query that some of you might be able to help me with..

I'm a music tutor (self employed) and have been paying into a personal pension plan with Scottish Life since 2006 (spoke to a FA at the time) approx £90 per month (government adds their tax relief on top). Ive been taking premium paying holidays at least 3/4 months of each year due to lack of wok over the summer months.

The (£90 approx a month is a big chuck to be paying in - SL have told me that figure is the minimum I can pay in each month...

I am wondering is it wise to keep paying into this as there have been various bad reports on pensions not being worth much come maturity etc...though after speaking to some on the other boards they have said this is usually from disgruntled pension holders who paid peanuts in and expected a big return...lol

Just wanting some advice or your thoughts on this and pensions of these types in general....?

Thanks for any help,

J

jem16

Link to replies already given to OP.

https://forums.moneysavingexpert.com/discussion/comment/60754873#Comment_60754873

bigadaj

You need to continue paying in, whilst it may seem a lot to you it is probably not enough to buy a decent pension. You contributions are around £1500 per year, so over forty years that would sixty grand, potentially doubling with investments, but could do better. Annuity rates currently would mean you'd be lucky to get five grand a year from this, plus your state pension which as you're self employed may not be a lot. You could therefore be looking to live on say twelve grand a year, which isn't much really.

Obviously you can only pay in what you can afford, and there are other places your money needs to go, if you can or are saving into isas then that will obviously help.

Pensions do change so it would be worth checking what you currently have, and possibly moving to another provider. Charges have reduced over the years and the range of investments is better on newer plans so it may well be worthwhile to switch provider.

atush

I am wondering is it wise to keep paying into this as there have been various bad reports on pensions not being worth much come maturity etc.

I am unaware of any such reports, pensions can only be as good as the contributions put in them, and the time left for them to grow. People who don't like what their pensions are paying out, are people who didn't put enough in, or didn't increase over the years to put in more once they were earning more.

I think you are reading the wrong papers perhaps?

So, what you need is a pension that will let you put in the amts you want (or take pmt holidays over the summer) or you could reduce your overall payments each month and save the difference to find a pension over the summer?

You need to look for low charges. So have a look at online providers such as Cavendish online, and look for a lifestyling option perhaps using something like Vanguard funds.

But whatever you do, you should have a pension. As you need to retire on something.

Have you been paying your NI contributions for a state pension? How many years have you got so far?

jlg1

Hi atush,

Thanks for that info.

In my old job I was in their work pension so I guess that's been frozen until I retire that was from 1994 to 2006. Been paying contributions to HMRC since 2006 at the basic rate i.e, around £13.25 per month. (Class 2)

In my very first job I think I took a pension that was contracted out of SERPS at the time with Royal London - I still get updates on that so I dont know exactly what way that will work....to be honest I was only 19 at the time and the boss said it was a good idea to go with (what was then) United Friendly.

I also had a personal plan with them because I was not permanent in my 2nd job but when I went to transfer/sort out the plan value they said I was a couple of months off it having a transfer value as I hadnt paid in long enough (under a year I think it was) and they said it wasnt worth enough so I lost £360 of my money in "admin/set-up charges"? (at least that's what they said it was) still think that was a bit suss to be honest...?

When I contacted Scottish Life I asked about reducing the monthly figure and they said the £87 per month is the minimum I could pay in, it couldn't be reduced. I was thinking of around £60/70 a month....hence I took a holiday again to think things over....

James